Are Banks Passive Liquidity Backstops? Deposit Rates and Flows during the 2007-2009 Crisis

Preprint OPEN
Acharya, Viral V; Mora, Nada;
(2011)
  • Subject: financial crisis; flight to safety; liquidity; liquidity risk; solvency risk
    • jel: jel:G01 | jel:G11 | jel:G21 | jel:E4 | jel:G28

Can banks maintain their advantage as liquidity providers when they are heavily exposed to a financial crisis? The standard argument - that banks can - hinges on deposit inflows that are seeking a safe haven and provide banks with a natural hedge to fund drawn credit li... View more
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